Federal Open Market Committee Meets Today and Tomorrow

Blog posted On January 31, 2017

The Federal Open Market Committee (FOMC) will have its first meeting of 2017 today and tomorrow.  This meeting will not be followed by a press conference with Chair Janet Yellen.  The FOMC typically does not raise rates at meetings that are not followed by a press conference, the first meeting with a press conference will take play March 14-15. 

Some incoming roster changes indicate that the FOMC’s voting members will become more dovish.  Chicago Fed President Charles Evans, known as the most dovish, forecasts two interest rate increases in 2017.  Philadelphia Fed President Patrick Harker is more in the middle on monetary policy, he has backed Yellen’s projections for three rate-hikes.  Minneapolis Fed President Neel Kashkari, and former Goldman Sachs executive, is in favor of patient rate hikes.

Economist have speculated whether the new administration’s policy changes will strengthen the economy.  In a recent speech at the Herbst Theater, Yellen reiterated that the Fed is “nonpartisan and focused squarely on public interest.  I have never had a situation where a member of the administration has tried in any way to pressure me for any reason about the stance of monetary policy.” 

During its December 2016 meeting, the FOMC voted to raise the benchmark interest rate from 0.5 to 0.75 percent, the first increase since December 2015.  Yellen has asserted that the economy has neared maximum employment and inflation is close to the 2% annual goal. 

Sources: FederalReserve.gov, San Francisco Chronicle, Business Insider